One new option he'll soon have is to buy insurance through Covered California's SHOP exchange. SHOP stands for for Small Business Health Options Program. It's California's version of a small-business insurance program that is part of the federal Affordable Care Act. The state has 500,000 small businesses.
All states are offering similar small-business exchanges. These are marketplaces for employers with 50 or fewer full time workers, and are designed to offer more affordable insurance to mom-and-pop businesses that have long paid more than large companies for the same level of coverage.
"Small businesses are horribly disadvantaged in terms of being able to purchase insurance," says Peter Harbage, president of the Sacramento-based health policy firm Harbage Consulting. "If they're even able to purchase it, they have to pay more and they get less."
Harbage says that not only will SHOP plans offer competitive prices, they will also offer tax benefits that for some smaller companies might cut premium prices in half.
But John Kabateck is not so optimistic. He is California executive director for the National Federation of Independent Business, and represents more than 22,000 small businesses in California.
"There are a lot of uncertainties as it relates to the law," he says. "We are hopeful that they will find affordable coverage within the exchange. We are hopeful they will have the ability to pick and choose in the marketplace."
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